House Republicans pass narrowed Bitcoin reserve bill

The national Bitcoin reserve lost its buying power before it even cleared committee.

House Republicans pushed the American Reserve Modernization Act through the House Financial Services Committee on a strict party-line vote. But the version that advanced is a shadow of its original ambition. Representative Brian Steele offered a substitute bill that stripped out direct federal purchasing mechanisms, eliminating funding pathways tied to Federal Reserve surplus funds and federal gold revaluation.

The pivot follows a hard boundary set by the executive branch. Treasury Secretary Scott Bessent previously ruled out direct open-market asset purchases by federal agencies, forcing Capitol Hill strategists to narrow their scope. Under Steele's revised text, the reserve cannot deploy taxpayer dollars to buy Bitcoin on the open market. Instead, the stockpile relies entirely on asset swaps, criminal forfeitures, and state-partnered deposit programs.

What remains is a custodial vault rather than an active accumulation vehicle. The bill mandates Treasury oversight across all agency holdings while locking deposited coins in a mandatory 20-year freeze. Democratic Representative Maxine Waters attempted to add an amendment barring federal officials and their families from holding major digital asset stakes or collecting related fees, but Republicans defeated the measure along party lines.

The legislative maneuvering unfolds against a broader retreat from statutory crypto oversight. On Bitcoin And | Bitcoin & Economic News, host David Bennett detailed how regulatory agencies are moving unilaterally after the Senate procedural failure of the Clarity Act. While the Securities and Exchange Commission and Commodity Futures Trading Commission draft administrative exemptions to bypass legislative gridlock, Congress remains constrained by tight political margins and fiscal realities.

Those fiscal realities are getting harsher. Federal Reserve Chair Kevin Warsh led a unanimous vote to raise benchmark interest rates to a range between 3.75 percent and 4 percent, citing persistent inflation. Rising yields pull capital away from risk assets while driving up national debt servicing costs. Goldman Sachs quickly revised its forecast, projecting another quarter-point interest rate hike in October.

Without direct buying authority, a national reserve exists mostly on paper. Lawmakers built the vault, but federal coffers won't be paying to fill it.